Choose the statement as true or false.

Home charges were the interest payments on India's external debt.

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False

True

answer is A.

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Detailed Solution

The above statement is true.
Before India's independence, home charges were a special type of donation used by the British government to cover the various costs associated with maintaining a colony. These consist of pension and salary payments from British residents in India and interest earned from India's external debt. The surplus from trade was used for these payments. India was charged with dividends on East Indies shares, interest on debt, salary and pension savings for executives, facilities and buildings in London's Indian office, and British military shipping costs to and from India. And it was known as a house membership fee. The UK's trade surplus in India helped British officials and traders pay personal remittances, interest on India's external debt, and household expenses such as pensions.

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